A lot has been written about the funding gap for startup companies. The idea that the first 50% is hard to get if you’re a startup remains true but it comes back doubly when you realise that you have to fund it 100% out of your own pocket and then go through a vouching and receipting scheme to claim back a maximum of 50% (and they’ll do their best to give you less, down to 30% is the aim).
Also, unless you have forecast that you’ll spend this money in this way, with an 18 month forecast expected, you can’t claim it. So any trade shows or new projects just can’t be counted. Therefore it’s not possible to be agile with your funding and there’s no way a startup can properly bootstrap while waiting for months for this kind of funding. The small number of investors (angels or venture capital) in the technology sector and especially the digital content sector just leaves it wide open.
Add to that the deMinimis rules (no company/entity can receive more than â‚¬200 000 in 3 years) means that support is extremely limited – despite the fact that the governments are throwing millions of pounds of taxpayer money at banks which have proved their inability to effectively manage a business.
At the Innovation Accelerator last week, Enterprise Ireland got a lot of cat-calling because of the convoluted processes they have in place an the poor amounts, percentages, schedules and timing of monies received once they are finally released. This is not an isolated case – this is going to be the case with every public funding source. It doesn’t matter if the adverts are saying otherwise, the reality is that private businesses need to be able to look after themselves.
The only stimulation you’ll get in the industry is with private money. You can’t expect the Public Sector to lead here – the public sector has no place in leading the private sector – they’ve no direct experience, they have layers and layers of red tape to qualify (which we the taxpayers have demanded they put in) and they are naturally risk-averse. It isn’t a great way to promote the digital content sector in any country any more than having a big party with free beer is a great way to create business networking opportunities.
I’m frustrated because it seems every time I get some progress, something else steps in the way. I’m done with it. Buy new laces, it’s Bootstrapping all the way.